Social commerce startup Meesho gets $3.4M Series A to build a reseller network in India

While most of the attention paid to India’s e-commerce boom focuses on big players like Flipkart, there’s another fast-growing sector: people, mostly women, who resell items on social media. Several startups now exist to serve the so-called “housewife reseller” market. One of them, Y Combinator alum Meesho, announced today that it has raised a $3.4 million Series A led by SAIF Partners.

Previous backers Venture Highway, Y Combinator and several angel investors also returned for the round, which brings Meesho’s total funding to $3.7 million so far. The Bangalore-based startup plans to hire more people for its tech and business operations teams and launch new product categories.

TechCrunch first covered Meesho in August 2016 when it took part in Y Combinator’s startup accelerator program. Since then, Meesho “has evolved from just a tool to sell socially for resellers to a full-stack network for resellers,” its founders Vidit Aatrey and Sanjeev Barnwal said in an email. This means it now helps resellers handle logistics, payments and product sourcing. Aatrey and Barnwal say these services are what differentiate Meesho from other recently funded social commerce startups in India like Glowroad and Shopmatic.

Meesho claims that 1,000 suppliers and 20,000 resellers now use its platform. Resellers pick what they want to sell to their WhatsApp, Facebook and Instagram followers by browsing Meesho’s marketplace (the most popular categories are fashion, lifestyle, home and kitchen supplies). Most items are dropshipped to buyers, so resellers don’t have to maintain their own inventory. Meesho monetizes by taking a seven to 15 percent commission from suppliers for every transaction, depending on product category.

The company says there are now three million resellers in India and that the market has mostly sprung up over the last four years thanks to growing smartphone adoption. The number of resellers is expected to grow six to eight times over the next five years. Meesho cites a report by management consulting firm Zinnov that says gross sales are expected to increase from $8 billion last year to $50 billion by 2022, with typical resellers making about 20,000 to 25,000 Indian rupees (about $310 to $386) per month.

In a statement, SAIF partners managing director Mukul Arora said “We are really excited about Meesho’s mission of building a new distribution channel for small/mid-sized brands, and helping resellers grow their business. This is a very India-specific opportunity with strong tail winds, and has potential to change how long tail products are sold in India. We are really impressed by Vidit and Sanjeev’s depth of understanding of this market, and are thrilled to partner with them on this journey.”

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